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U.S. Department of Homeland Security Washington, DC 20229
U.S. Customs and Border Protection
HQ H246942
November 5, 2013
BOR-7 OT:RR:BSTC:CCR H246942 RES
CATEGORY: Carriers
Matthew Clark
SEKO Customs Brokerage Inc.
1100 Arlington Heights Rd.
Suite 600
Itasca, IL 60143
RE: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. § 10.41a; Substantial Containers or Holders; Harmonized Tariff Schedule of the United States (HTSUS) subheading 9803.00.50; honey storage containers.
Dear Mr. Clark:
This is in reference to your July 25, 2013, ruling request on behalf of your client, Harris and Ford, LLC. (“Harris & Ford”), in which you inquire whether honey storage containers (“honey containers”) qualify as “instruments of international traffic” (IITs) within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a and may be released without entry or the payment of duty pursuant to subheading 9803.00.50, Harmonized Tariff Schedule of the United States (“HTSUS”).
FACTS
The following facts are from your July 25, 2013, ruling request, and a November 5, 2013, email, which included pictures of the subject articles. The subject articles, which are used to transport honey, are described cube shaped containers made of high-density polyethylene (HDPE) that come in four different volume capacities: 170 gallons, 220 gallons, 275 gallons, and 330 gallons. The containers are reinforced with a grid made of welded tubular steel; have a bottom plate that supports the container and provides stability; and measured to fit a four-way entry pallet for loading and transport via truck. The subject articles are owned by Harris & Ford and will only be used for the transportation or transfer of honey in international traffic and will not be held in the United States but will be exported repeatedly and reused for subsequent importations. You state that the importer uses 50 of these honey containers two to three times a month for the importation of its merchandise and that the subject articles life span is five to six years.
Figure 1 Figure 2
ISSUE
Whether the subject honey containers are instruments of international traffic pursuant to 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a?
LAW AND ANALYSIS
Pursuant to 19 U.S.C. § 1322(a), IITs shall be excepted from the application of the Customs laws to the extent that such terms and conditions are prescribed in regulations or instructions. The relevant Customs and Border Protection (CBP) regulations implementing that statute are found at 19 C.F.R. § 10.41a(a)(1) which provides in pertinent part:
Lift vans, cargo vans, shipping tanks, skids, pallets, caul boards, and cores for textile fabrics, arriving (whether loaded or empty) in use or to be used in the shipment of merchandise in international traffic are hereby designated as "instruments of international traffic" . . . The Commissioner of Customs [now CBP] is authorized to designate as instruments of international traffic, . . ., such additional articles or classes of articles as he shall find should be so designated. Such instruments may be released without entry or the payment of duty, subject to the provisions of this section.
19 C.F.R. § 10.41a(a)(1)(emphasis added).
To qualify for entry-free and duty-free treatment as IITs under the aforementioned statutory and regulatory authority, the article must be a substantial container or holder. As stated above, CBP is authorized to designate as an IIT such additional articles not specifically noted in 19 C.F.R. § 10.41a(a)(1). Historically, CBP has held in its published decisions that in order to qualify as an IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1), an article must be substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. See HQ H016491 (Oct. 1, 2007); HQ 114150 (Dec. 12, 1997); HQ 107545 (May 7, 1985); Treas. Dec. 71-159, Cust. B. & Dec. 296 (June 18, 1971); 99 Treas. Dec. 533, No. 56247 (Aug. 26, 1964).[1]
Subheading 9803.00.50, HTSUS provides for the duty-free treatment of:
Substantial containers and holders, if products of the United States (including shooks and staves of United States production when returned as boxes or barrels containing merchandise), or if of foreign production and previously imported and duty (if any) thereon paid, or if of a class specified by the Secretary of the Treasury[2] as instruments of international traffic, repair components for containers of foreign production which are instruments of international traffic, and accessories and equipment for such containers, whether the accessories and equipment are imported with a container to be reexported separately or with another container, or imported separately to be reexported with a container.
(footnote and emphasis added). Subchapter 98 of the HTSUS only applies to:
(a) Substantial containers or holders which are subject to tariff treatment as imported articles and are:
(i) Imported empty and not within the purview of a provision which specifically exempts them from duty; or
(ii) Imported containing or holding articles, and which are not of a kind normally sold therewith or are entered separately therefrom; and
(b) Certain repair components, accessories and equipment.
See U.S. Note 1, et seq., Chapter 98, HTSUS.
The honey containers are substantial, insofar as they are made of HDPE and welded tubular stainless steel and have a life span of five to six years; are suitable and capable for repeated use in that they are exported and reused for subsequent importations of merchandise two to three times a month; and are used in significant numbers insofar as approximately 50 honey containers are used annually to transport cargo in international traffic.
Based on the foregoing, the honey containers are instruments of international traffic within the meaning of 19 U.S.C. 1322(a) and 19 C.F.R. § 10.41a(a) and therefore, may be released without entry or the payment of duty under subheading 9803.00.50, HTSUS.
HOLDING
The subject honey containers described above are designated instruments of international traffic within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a and they may be released without entry or the payment of duty under subheading 9803.00.50, HTSUS.
Sincerely,
Lisa L. Burley
Chief
Cargo Security, Carriers and Restricted Merchandise Branch
Office of International Trade, Regulations & Rulings
[1] The requirement that an article be "substantial" is not only a threshold requirement under 9803.00.50, supra, but also a requirement for an article to be an instrument of international traffic pursuant to CBP decisions. The origin for the criterion found in CBP decisions that an article be "substantial" is found in Schedule 8, Item 808.00 of the Tariff Schedule of the United States (1963)(TSUS), the predecessor provision to 9803.00.50, HTSUS. Likewise, the criterion that an article be "suitable for and capable of repeated use" is found in Schedule 8, Item 808.00, TSUS, Headnote 6(b)(ii)(stating that the article must be capable of "reuse"). Although the requirement that an article be capable of reuse is no longer under subheading 9803.00.50, HTSUS (the successor provision to Item 808.00, TSUS), to receive duty-free treatment thereunder nevertheless, "reuse" is still required, pursuant to CBP decisions, for an article to be considered an instrument of international traffic.
[2] Customs revenue functions have been delegated to the Secretary of Homeland Security by the Secretary of Treasury, with exceptions herein not applicable, under the authority of the Homeland Security Act of 2002, Pub. L. 107-296. See Treas. Dep't Order 100-16 (May 15, 2003).